DIFFERENCE BETWEEN CENTRALIZED AND DECENTRALIZED.
Centralized:
In a centralized system, there is a single controlling entity that has authority over the entire network. This entity makes decisions, manages transactions, and holds control over the system's operations. Traditional banking systems are examples of centralized systems, where a central bank or financial institution maintains control over transactions, accounts, and monetary policies. In the context of cryptocurrencies, centralized exchanges operate similarly, as they act as intermediaries for trading and hold users' funds under their control.
Decentralized:
In a decentralized system, control and decision-making are distributed across a network of participants, eliminating the need for a central authority. Blockchain technology is often used to implement decentralized systems. In a decentralized cryptocurrency network, transactions are validated and recorded by a distributed network of nodes, removing the need for a central entity to oversee transactions. Examples of decentralized cryptocurrencies include Bitcoin and Ethereum.
In summary, the main difference between centralized and decentralized in the context of cryptocurrencies lies in the distribution of control and decision-making. Centralized systems have a single controlling entity, while decentralized systems distribute control across a network of participants through the use of blockchain technology.
